Tercica Reports Second Quarter 2008 Financial Results

Business Wire, July 31, 2008

BRISBANE, Calif. -- Tercica, Inc. (Nasdaq: TRCA) today announced financial results for the quarter ended June 30, 2008. Net product sales totaled $6.2 million, compared to $2.0 million in the second quarter of 2007. Net product sales for Increlex([R]) and Somatuline([R]) Depot in the second quarter of 2008 were $4.6 million and $1.6 million, respectively.

Net loss for the second quarter of 2008 was $11.4 million, or $0.22 per share, compared to a net loss of $12.8 million, or $0.26 per share, for the second quarter of 2007.

Cash, cash equivalents and short-term investments as of June 30, 2008 were $71.4 million, compared to $94.9 million as of March 31, 2008.

Company Updates

Agreement and Plan of Merger with Ipsen.

* On June 4, 2008, Tercica announced that Tercica and an affiliate of Ipsen, S.A. entered into an agreement and plan of merger by which an affiliate of Ipsen would acquire all of the shares of Tercica common stock that Ipsen does not currently own at a price of $9.00 per share in cash.

* On July 24, 2008, Tercica announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and clearance by the German antitrust regulatory authority in connection with the agreement and plan of merger. Assuming satisfaction of the closing conditions in the agreement and plan of merger, including stockholder approval, Tercica estimates that the completion of the merger transaction should take effect late in the third quarter or early in the fourth quarter of 2008.

* On July 24, 2008, Tercica also announced that Ipsen exercised in full the warrant issued by Tercica in October 2006, converted in full three convertible notes issued by Tercica in October 2006 and September 2007, and purchased 410,831 additional shares of the common stock of Tercica upon exercise of its pro rata rights to purchase shares in connection with other equity issuances by Tercica. Total cash proceeds from the warrant exercise and purchase of additional shares by Ipsen were $40.3 million.

Somatuline([R]) Depot

* In a meeting on July 15, 2008 with the Food and Drug Administration (FDA), Tercica discussed the development program for Somatuline([R]) Depot in the treatment of carcinoid syndrome, caused by certain neuroendocrine tumors (NET). Based on the outcome of this meeting, Tercica plans to initiate a Phase III clinical trial in this indication in the U.S. by the end of 2008. Based on Tercica's most recent assessment, Tercica believes that the market for somatostatin analogues in this indication is significantly larger than that for acromegaly.

Increlex([R])

* In a meeting on July 30, 2008 with the FDA, preliminary data from MS 301, a Phase IIIb study evaluating the use of Increlex([R]) in patients with Primary IGFD, a less severe and more prevalent form of IGFD, was discussed. These preliminary data suggest that the study will meet its primary endpoint of statistically significant increase in first-year height velocity compared to the observation-only group. Furthermore, no new safety issues were identified in this study.

* For approval in this expanded indication, the FDA has requested additional long-term clinical data. Based on the FDA's request, Tercica plans to review the regulatory strategy for Primary IGFD.

* These FDA discussions and Tercica's plan to review the regulatory strategy for Primary IGFD do not have any impact on the proposed merger transaction with Ipsen.

About Tercica

Tercica is a biopharmaceutical company committed to improving endocrine health by partnering with the endocrine community to develop and commercialize new therapeutics for short stature and other metabolic disorders. For further information on Tercica, please visit www.tercica.com.

Safe Harbor Statement

Except for the historical statements contained herein, this press release contains forward-looking statements concerning Tercica's prospects and results, including that: (A) Tercica estimates that completion of the transaction contemplated by the agreement and plan of merger with an affiliate of Ipsen should take effect late in the third quarter or early in the fourth quarter of 2008; (B) the MS 301 study will meet its primary endpoint of statistically significant increase in first-year height velocity compared to the observation-only group; (C) Tercica expects to initiate a Phase III clinical trial of Somatuline([R])Depot for the treatment of carcinoid syndrome caused by certain neuroendocrine tumors by the end of 2008; and (D) Tercica believes that the market for somatostatin analogues in the treatment of carcinoid syndrome caused by certain neuroendocrine tumors is significantly larger than that for acromegaly. Because Tercica's forward-looking statements are subject to risks and uncertainties, there are important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, risks and uncertainties related to the following: (i) regarding (A) above, the transactions contemplated by the agreement and plan of merger with an affiliate of Ipsen may not be consummated as the transaction is subject to certain closing conditions, the closing of the transaction may be delayed and the expected benefits of the transaction may not be realized; (ii) regarding (B) above, the risks and uncertainty of any clinical trial, including unexpected final results that may not be consistent with the preliminary results of the trial; (iii) regarding (C) above, Tercica may have protocol or other technical and non-technical issues preventing or delaying the commencement of the trial; (iv) regarding (D) above, Tercica's assessment of the market for somatostatin analogues in the treatment of carcinoid syndrome caused by certain neuroendocrine tumors may be incorrect and may be significantly less than Tercica expects; and (v) the risks and uncertainties disclosed from time to time in reports filed by Tercica with the Securities and Exchange Commission (SEC), including most recently Tercica's Form 10-Q for the quarter ending March 31, 2008 filed with the SEC on May 12, 2008. Tercica disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release.